7 reasons Goldman says beaten-down tech stocks are now a buying opportunity

• Goldman says it's time to buy the dip in the ailing tech sector.
• The corner of the market has been battered by AI disruption fears and the Iran war this year.
• The bank shared seven reason valuations are now looking attractive for investors.

If you're looking for a good reason to buy the dip in tech stocks, Goldman Sachs has several for you.

The sector has endured a rough start to 2026, as investors have come to fear that AI could fundamentally disrupt business models across industries, while investors remain concerned about soaring capex from mega-cap hyperscalers.

The State Street Technology Select Sector SPDR ETF (XLK) is down 5.7% this year, and down 10.4% from its October 29 peak.

But in a note to clients on Tuesday authored by Global Equity Strategist Peter Oppenheimer, the bank said that it could be a good time to start buying the sector, calling it a "value opportunity."

The firm shared a handful of charts illustrating the sector's attractiveness. Let's dive in.

1. Let's start with the sector's performance so far this year. In the context of the last half-century, it's off to one of its worst starts to a calendar year, going back to at least 1976.

2. Second, the global tech sector's forward-looking PEG ratio has now fallen well below the broader global market's. Short for price-to-earnings-to-growth, the PEG ratio compares 12-month forward earnings expectations with expected earnings growth over the second 12-month period. The tech sector's forward PEG ratio has dropped below 1, implying it is undervalued.

3. Tech stocks' trailing PEG ratio is also in undervalued territory. This measure takes the guesswork out by comparing trailing 12-month earnings to the last three years of earnings growth.

"The collapse in the technology 'look back' PEG implies that future earnings will be much weaker and is as low as the trough after the tech bubble burst in 2003-05," the bank said.

4. Global tech and software stocks' forward 12-month PE ratios relative to the rest of the world are also at lows not seen since at least 2019.

5. By the same valuation measure, global technology stocks now trade virtually at their 20-year median. Only the financials sector trades at a similar level relative to its own history, while every other sector's valuation is historically more expensive

6. Next, while US tech, media, and telecom (TMT) stocks have an elevated price-to-book ratio, their return on equity is also high, suggesting it's at a historically appropriate and on-trend level. Return on equity refers to a company's profits compared to its equity market capitalization.

Goldman said this should quell fears about overspending on AI infrastructure.

At the peak of the dot-com bubble, by comparison, return on equity levels were not on par with price-to-book levels.

7. Finally, despite the recent sell-off, the net percentage of positive analyst earnings revisions for 2026 and 2027 for global tech stocks is outpacing every other sector.

Here's that discrepancy illustrated.

Examples of funds that offer exposure to technology stocks include the Vanguard Information Technology ETF (VGT), Fidelity MSCI Information Technology Index ETF (FTEC), and iShares Global Tech ETF (IXN).